The Broadband Explosion: are you ready?

Five steps you should factor into your contingency plan are highlighted, including creating return on investment for new technology.

Use whatever analogy you want—bedrock, keel, foundation, guiding
light—an effective strategy allows you to make decisions. By rigorously
analyzing your environment, core strengths, customer requirements and
competitive offerings, you develop a strategy that enables
decision-making regarding how to invest resources, where to direct
energy and how to manage time. Most important, it makes rapid decisions
possible, without the hesitation that allows windows of opportunity to
slam shut or competitors to gain a lead.

If the strategy includes thorough contingency planning, it can
facilitate decision-making even when there is a massive disruption in
your environment, customer base or competitive ranks. A few years ago,
the Internet blew apart strategic planning because it introduced
technology that exploded every element of an organization’s business.
Amongst the swirl of hype, buzzwords and VC excesses, many companies
experienced strategic paralysis. The dust has now settled, allowing key
strategic considerations to come into focus, and companies have begun
to grasp how to integrate the Internet into their overall strategy.
Unfortunately, contingency planning has remained a challenge and, if
the writers of a new book are correct, is about to become much more
difficult.

The authors of
The Broadband Explosion, Stephen Bradley and Robert Austin, suggest
that the age of true broadband may be finally arriving. They define the
broadband explosion as: “the coming together of real-time communication
and rich media technologies to produce a truer form of interactivity
across geographic distance than has been possible up until now.” They
argue that this explosion has implications for “how business strategy,
production technologies, and marketing—to name just a few—may be
changed dramatically.”

There will be a qualitative shift in what we can achieve
when reliable bandwidth reaches a certain point. While there
is debate about where the point is, even at 10 megabits per second (20x
faster than a cable modem), we will begin to find new ways to add value
and “this will change a lot about how businesses operate and also about
what they can sell and how they sell it.”

Most of the broadband benefits will arise from things we
can’t see clearly right now. We witnessed the same issue when
people received massive increases in computing power, and used it to do
the same things faster—like process pay cheques—before visionaries used
that power to change the way we interacted with computers. “Back then,
people who said, ‘What will we use all that computing power for?’ were
surprised by how useful it was and the ways it turned out to be
useful,” says Austin. “Today we have some skeptics saying pretty much
the same thing: ‘What will we do with all that bandwidth?’ I suspect
the answers will be similarly surprising.”

Increased bandwidth will create a more interactive
experience in communication. “This has the potential to
supercharge innovation, because we can prototype more ideas and share
them with each other much more rapidly,” observes Austin. “That's on
the supply side of the economy. On the demand or marketing side, the
new technology may allow us to match more customers with just what they
want, by employing a strategy that Eric Clemons and his coauthors in a
chapter in the book call ‘Hyperdifferentiation.’”

So how does technology that will alter essentially all elements of
your Internet strategy factor into your contingency planning? Clearly,
you can’t ignore broadband. But if the best minds at a Harvard
colloquium don’t know what its implications will be, and the technology
isn’t yet a reality, you probably don’t need to factor it into next
quarter’s plan.

Steps you should take today, however, to begin factoring broadband
into your contingency plan and Internet strategy include the following.
It’s all going to seem like common sense, but as we saw with the first
advent of the Internet, common sense was the first casualty (Remember
the customer-free business models?).

Make sure your strategy is up-to-date, disseminated and is
guiding decision-making. One value of impending disruption,
like the advent of broadband, is that it creates a compelling
motivation for the entire organization to take strategy seriously. Take
the dust test: if your copy of the strategic binder has any on it, it’s
time for a refresh. Also, if there’s only one binder, you may need to
get the team together so the strategy is being shared and utilized.
Finally, if there’s no binder at all, the first step is obvious.

Ensure you are maximizing existing Internet
technology. As the old saying goes: “Now is not the time to be
doing nothing.” Whenever pundits espouse massive change, there can be a
tendency to take a “wait and see” attitude and put projects on hold
while committees study potential implications. Very few organizations
are maximizing such available opportunities as blogging, which
Prescient Digital Media’s President, Toby Ward, has been very
passionate about evangelizing. Maximizing the technology doesn’t mean
investing in software, hardware or integration, either. It could be
better understanding how you are interacting with customers or what
processes you have put in place to utilize Web-enabled
technology.

Know your customers. There has never been a more
important time for ensuring that customer
knowledge/intimacy/satisfaction are not just clichés in your
organization. The Internet has taught us the value of permission-based
marketing, but it has also demonstrated the importance of customer
permission: how will your customers permit you to communicate with them
and what will your customers permit you to sell to them. The Internet
spawned exciting new companies like Amazon which found innovative ways
to communicate with and sell to customers. It also rewarded existing
players that grasped how to reinvent themselves while still delivering
a consistent brand experience. And it punished companies that
disappointed customers by behaving in ways in which their customers had
not permitted. As Bradley and Austin point out, broadband will
fundamentally alter how you communicate with customers and what you
sell to them. But as we discovered with the first wave of the Internet,
no technology allows a company to make decisions that don’t include a
detailed knowledge of customer permission.

Ensure your team is educated and sharing
knowledge. Whether it’s on-line learning, reading books like
the Broadband Explosion, taking bricks-and-mortars courses or attending
seminars,
there have never been more educational resources available to
employees. With downsizing, e-mail overload and an explosion in
information, unfortunately, there has never been less time to utilize
those resources. Nonetheless, statistics consistently demonstrate that
learning organizations outperform their competition. You need
to ensure that your performance management system includes objectives
for constant education, and your communications infrastructure permits
team members to efficiently share their knowledge. In our experience,
this is an area in which many companies can still score quick wins. Too
few companies that have deployed a Content Management System, for example, are
enjoying the full benefits of the system, and leading companies are
only now beginning to fully create productivity gains from such
innovations as integrating blogs into a community of practice.

Know how to create an ROI for new technology.
Possibly the single biggest lesson of the Internet is that you can’t
ignore the bottom-line: every dollar you spend must result in more than
one dollar being saved or earned. The Internet and web-enabled
technology complicate ROI calculations, because they often require
calculating seemingly intangible factors, but it can be done. One
encouraging sign for us is that the most popular download on our busy
web site is the Finding ROI White
Paper. When broadband really hits, those organizations and managers
that have come to grips with creating an ROI for their CMS or Intranet
will have a significant edge on their competitors who will be only
beginning to climb the learning curve of this complex and important
task.

This advice is all common sense, but it’s also a lot of work. That
effort, combined with our gerbil-on-a-wheel lifestyle, probably
explains why everyone knows they need to take these actions, but few
get around to them. Nonetheless, we all know examples of companies
which have taken the time to put a strong strategy in place, complete
with a thorough contingency plan, and are then able to make effective,
quick decisions when their world changes. We’ve also seen companies in
which the leadership team sits in the boardroom, looks at each other
and says: “What’s going on, and what are we going to do…?”

The threat and opportunity that will be created by the impending
broadband explosion should motivate us to engage in the fundamentals of
strategy, especially contingency planning. We may not know when the
broadband explosion will occur, and what the impact will be, but we do
know that it will require us to make decisions. And history has shown
us that the organizations that make the best decisions have the best
strategy.

Prescient Digital Media is a
veteran web and intranet consulting firm with 10+ years of rich history.
We provide strategic Internet and intranet
consulting, planning and communications services to many Fortune 500 and
big brand clients, as well as small and medium-sized leaders.